Woody’s Wharf:

“A real slap in the face to city officials”

What happens when a city councilman tries to fill the roles of judge, jury and executioner? An epic fail, as explained here by California-based First Amendment attorney Roger Jon Diamond.The major impediment to the establishment of a club is the particular city in which the club is to operate. Many clubs have their origins in successful lawsuits filed against the particular city involved. Even if the club would satisfy local zoning ordinances, many cities still try to find ways to block the opening of the club. In addition to local restrictions by zoning laws many cities require permits and make it difficult if not impossible for the proposed club to acquire the necessary permit.

Attorneys who fight cities to open up clubs frequently need to challenge the substantive aspect of the city’s ordinance. A successful substantive challenge would mean that a court decides that a particular local zoning law is unduly restrictive and therefore violates the First Amendment to the United States Constitution. I have won many cases for clubs because the local restriction has been found to be unconstitutional, and I’ve handled a number of cases where the courts have ruled that the particular restriction is unconstitutional and therefore not enforceable. But there is another way to win even if the law in question is constitutional on its face or as applied. That alternative way to win is based on what I call “procedure.” The purpose of this article is to discuss a less frequent but very effective way to beat a city and win the fight for a strip club, and I will provide examples of procedural victories that accomplish the same purpose as a victory on substance. What prompted this article was the recent success I had with the California Court of Appeal for a restaurant/bar known as Woody’s Wharf in the City of Newport Beach.What do I mean by procedural victory? What I mean is winning the case because the procedures followed by the City in its effort to stop the business or in its effort to shut the business down violated the law. Before I get to the most recent case, Woody’s Group, Inc., v. City of Newport Beach, (2015), I will mention another procedural victory that had the same effect as winning on the merits—that is, by winning the business was able to open or remain open.In Madain v. City of Stanton, (2010), my client attempted to obtain a city permit for a strip club in the City of Stanton in Orange County. He went to the City Hall to submit his application but was told to come back in two weeks. In the meantime, city officials allegedly manipulated the process by awarding a permit to a church which obtained an over-the-counter permit to operate. The church would disqualify the strip club, and the city officials then denied the strip club permit. That triggered a hearing before the City Council, which made no findings on Madain’s claim that the city officials manipulated the process by deliberately helping the church. I filed a lawsuit with the Superior Court, which was rejected, but the Court of Appeal reversed. The City Council made no findings, as of the Court of Appeal noted, on the claim that the City manipulated the process in favor of the church. The Court of Appeal reversed the judgment of the Superior Court and remanded the matter for further proceedings. Madain prevailed after the remand arbitration, and the club opened. Winning a procedural fight can be just as effective as winning on the substance. This leads us to the most recent case that I just completed, Woody’s Group, Inc., v. City of Newport Beach, supra. The case is all about procedure. It was critical to the successful outcome of the case. The case began when neighbors complained about alleged noise coming from Woody’s Wharf and about bars in general generating patrons who urinate and vomit in the neighborhood. Woody’s Wharf is situated in a mixed commercial-residential zone of the city. The city’s police department threatened Woody’s because it did not have the required dance permit and was violating conditions placed on the property by operating its outside deck after 11 pm. To resolve the matter, Woody’s filed an application with the City Planning Department for a modified conditional use permit to expressly allow patron dancing and to allow the deck to remain open after 11 pm. Applications for conditional use permits and for modifications of those permits are heard by Planning Commissions. In this particular case, the Planning Commission conducted a lively and well-attended hearing. Unlike most cases where one has to first exhaust available local administrative remedies by going through all the city hoops and then winning in court, Woody’s actually won before the Planning Commission. The Planning Commission voted to approve permits for outdoor usage of the deck until 2 am and also voted to allow patron dancing.

I appeared before the Newport Beach City Council on behalf of Woody’s Wharf and expressly lodged an objection to the fact that the appeal was not filed by an interested party, nor did Councilman Henn pay the appropriate fee or fill out the appropriate form. I was ridiculed by the city attorney for even suggesting that it was improperly taken up by the city council.

After winning before the Planning Commission, my client and I were notified that the matter would be taken up by the City Council at a public hearing. I never take anything for granted. I assume nothing. Although we were notified as to the date of the hearing of the appeal, I decided to review the actual ordinance dealing with appeals to the City Council and I noted that appeals must be filed by “an interested party” and a fee must be paid. Moreover, the appeal must be on a form provided by the City Clerk and must explain the basis for the appeal. Just prior to the appellate hearing before the City Council I obtained a copy of the obscure provision of the Newport Beach Municipal Code dealing with appeals to the City Council from Planning Commission decisions. I also discovered how the appeal was filed. Essentially, council member Michael Henn sent an email to the city clerk simply asking that the matter be placed on the council agenda for its consideration and review. I was told that this is the traditional way the City of Newport Beach handles matters—either an interested party appeals or a city council member himself or herself can call it up for review. I appeared before the Newport Beach City Council on behalf of Woody’s Wharf and expressly lodged an objection to the fact that the appeal was not filed by an interested party, nor did Councilman Henn pay the appropriate fee or fill out the appropriate form. I was ridiculed by the city attorney for even suggesting that it was improperly taken up by the city council. The city attorney stated at the public hearing in front of everyone that the City of Newport Beach traditionally did it this way and that there had been many appeals filed by city council members. City officials tried to make me feel that the objections were frivolous and contrary to policy and practice. Unfazed, I stuck to my guns and argued the matter. I also asked that the councilman himself, Michael Henn, who filed the so-called appeal, be recused because he could not be fair and impartial since he was the appellant. The city attorney cited an earlier Court of Appeal case, BreakZone Billiards v. City of Torrance where a councilman for the City of Torrance also appealed. That case however, was distinguishable because in that case he did not argue in his appeal for reversal, but simply that the city council should review the matter.It was clear throughout the public hearing that Henn took the lead in advocating the reversal of the Planning Commission’s decision. More important, I noticed that when Henn made his motion at the conclusion of the city council meeting, he appeared to be reading from prepared text. I called him out on that issue and pointed out to everyone that he appeared to have made up his mind before the hearing because he had already prepared his written motion to reverse the Planning Commission. He made some self-serving statements that he was neutral and unbiased. The city council voted four to one (with two recusals or absences) to reverse the Planning Commission. I immediately filed a petition for writ of administrative mandamus with the local court. The City filed a cross complaint to obtain a preliminary injunction prohibiting patron dancing and requiring the deck to close by 11 pm. Both matters were heard by Superior Court Judge Derek Hunt. The only thing I learned about Judge Hunt was what I was told by fellow attorneys—that no matter how argument goes, Hunt was most concerned about whether attorneys appearing in front of him kept their hands in their pockets, which he didn’t like. I made sure that I argued the case with my hands not in my pockets, but I still lost. Fortunately we have appellate courts. On January 29, 2015 the Court of Appeal handed down its dynamite decision in Woody’s Group, Inc., v. City of Newport Beach. The important points for the reader to retain is that if a city council member takes a position on a particular issue contrary to your position, seek to have him disqualified. As the Court of Appeal noted in the Woody’s Group case, the first basic principle of law is that one cannot judge his own case. The Court of Appeal severely criticized Henn and the City for allowing Henn to appeal and then sit in judgment of his own appeal. While it is true that in BreakZone Billiards v. City of Torrance, City Councilman Dan Walker was permitted to appeal in that particular case the City Code authorized the appeal, but more importantly, Walker did not see fit to criticize the decision of the Planning Commission that was being appealed to the city council. I was able to distinguish the BreakZone Billiards case from the Woody’s problem. The City relied heavily on the BreakZone case. The Court of Appeal agreed with my argument that the matter should not simply be sent back to the City Council with Henn recused. The Court of Appeal agreed with my argument that the City Council lacked jurisdiction because the appeal was not properly filed. The important point of the Woody’s Group case is that city councils do not sit only as legislative bodies, but also as adjudicatory bodies. When city councils legislate, they are given much more freedom than when they are resolving particular disputes between parties. The Woody’s Wharf case was a major decision in California. It teaches us that city council members themselves must follow the same laws imposed upon the citizens. It stands for fairness and it supports efforts to have antagonistic city council members disqualified from hearing a particular case. I recommend paying close attention to this case, as it was a real slap in the face to city officials.

First Amendment attorney Roger Jon Diamond has been successfully defending adult businesses and other individuals for over 40 years. He is also a frequent Club Bulletin contributor and EXPO legal panel participant. Diamond’s office is located in Santa Monica, CA, and he can be reached there at (310) 399-3259 or via email at rogdiamond@aol.com.